While privacy advocates stew about potential misuse of emergent radio frequency identification (RFID) tags, the technology’s promoters see a world of endless opportunity. An RFID system is like barcode technology on steroids. Each tagged item is assigned a unique ID number linked to information specifically about that item—when and where it was made, how much it costs, a travel history from production floor to store shelf. It also contains a simple radio transmitter that allows the data to be “interrogated” by computerized readers. The reader can move the information to an online database where it can provide real-time information for managers. The big difference between RFID and barcoding is that, when products and components are tagged individually, “every object is part of the ecosystem of the Internet,” says Benoit C.A. Gaucherin, CTO of Sapient. Gaucherin proposed a scenario wherein an auto insurance agent might interrogate your car’s engine to see how fast it has run before quoting you a price. Interest in RFIDs escalated last year when Wal-Mart required its top 100 suppliers to deliver goods with RFID tags.

HBS Working Knowledge 2 Feb 2004